Federal Flood Vote Possible

March 11, 2014

WHEELING - With a Senate vote on relief for millions of property owners facing soaring flood insurance premiums potentially just days away, area House members who supported the compromise bill are confident senators will follow suit.

In January, the Senate approved an outright delay of premium increases under the Biggert-Waters Flood Insurance Reform and Modernization Act of 2012 that are affecting thousands of West Virginians, including about 2,000 property owners in West Virginia's Northern Panhandle alone. But House members, concerned the Senate plan failed to address the underlying problem - a National Flood Insurance Program drowning in $24 billion worth of red ink - voted to enact more modest reforms on March 4.

Senate leadership has indicated a vote on the measure could happen this week, according to Katie Longo, spokeswoman for Sen. Joe Manchin, D-W.Va., and House members representing the Mountain State said they feel good about its prospects.

"Early indications are that there's a lot of support for this in the Senate," said Rep. Shelley Moore Capito, R-W.Va. "Nothing's a sure deal over here, but I would say that it's looking very good that this bill will be passed and signed by the president."

The flood insurance snafu has become a key issue in Capito's bid to succeed retiring Sen. Jay Rockefeller, D-W.Va. Democrat Secretary of State Natalie Tennant, Capito's likely opponent in the general election, has zeroed in on the issue in her campaign, repeatedly criticizing Capito's vote in favor of Biggert-Waters, which ultimately was tacked onto a bill providing funding for transportation and veterans' benefits.

But Capito said she and more than 400 others in the House who supported the Biggert-Waters reforms were deceived by a Congressional Budget Office report - based on information from FEMA - that predicted affected properties would, at most, see their premiums increase to two and one-fourth times the previous rates.

"It just was absolutely wrong, and that's what we based our vote on," Capito said.

The House bill reduces maximum annual premium increases on "grandfathered" properties from 25 percent to 18 percent, prevents more severe increases when a property changes hands. It also calls for refunds for those who purchased a home between July 2012 and October 2013 believing they would still receive grandfathered rates, only to learn their new policies would be written at full-risk rates. It pays for the relief by tacking an annual surcharge onto policies - $25 for primary homes and $250 for businesses and secondary homes.

"This proposal will not add to the debt and makes permanent reforms," said Rep. David McKinley, R-W.Va. "Most importantly, it will end extreme flood insurance rate increases and help communities like Wheeling, New Martinsville and Fairmont. ... Now we're hopeful this legislation will pass the Senate quickly and immediately give homeowners the relief they need."

Some, including environmental groups and insurance industry lobbyists, have opposed altering Biggert-Waters at all, claiming doing so encourages people to continue building in risky areas and shuts the private market out of the flood insurance business.

"No insurance company can compete with the low rates being offered by Congress, or ask their other policy holders to make up the loss," said Matt Brady, director of federal public affairs for the National Association of Mutual Insurance Companies.

Capito said she understands the concerns, but believes the House bill will address those issues over time without crippling the real estate market and devastating homeowners who rarely, if ever, have filed a claim.

"They don't think anybody should be subsidized if they're building their home in a floodplain. And it's hard to argue against that when you have a program that's $24 billion in the red," she said.